Balfour Beatty plc’s 6% Yield

Balfour Beatty plc (LON: BBY) says its markets continue to be challenging.

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The shares of Balfour Beatty (LSE: BBY) bounced 12p, or 6%, to 232p during early trade this morning even though the construction group confirmed its markets had remained “very challenging“.

Within a trading update that reviewed the first six months of the year, the FTSE 250 mid-cap today admitted the performance of its professional services business in Australia had been worse than expected.

Balfour cited “a significant number of project cancellations in the natural resources sector as well as the consequential impact on federal and state revenues and spending plans” for the Australian shortfall.

The company also said its struggling UK construction division had delivered a “weak performance” and was expected to achieve a break-even position for 2013 as a whole.

An order book of around £16bn, net debt of £300m and asset disposals of £45m were other figures cited within this morning’s statement.

Prior to today, City experts were predicting Balfour would deliver 2013 earnings of 24p per share — down some 31% on the level achieved for 2012.

The same brokers were expecting the dividend to be maintained at 14.1p per share as well.

Based on those projections, the shares this morning trade on a forecast P/E of less than 10 and offer a possible dividend income of 6%.

Of course, whether those numbers and this morning’s statement combine to make Balfour a ‘buy’ right now is something only you can decide.

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> Maynard does not own any share mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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